Credit rating agency Icra projects that Indian IT companies are likely to have moderate revenue growth of 4-6 percent in FY26, with hiring expected to remain muted until growth picks up speed at the end of the fiscal year.

Over the short term, the agency predicted that the attrition rate would average between 12 and 13 percent.

During the first nine months of FY2025, Icra's sample set saw a 3.6 percent increase in revenue year over year in US dollars.

Thanks to a reduced base from FY2024, this growth was a part of a slow comeback over the last three quarters.

In some markets, customers' discretionary spending in the retail and BFSI sectors also increased slightly, according to Icra, and investments in generative AI projects resulted in new orders.

The sample set includes Birlasoft, Coforge, Cyient, HCL Technologies, Infosys, LTIMindtree, L&T Technology Services, Mastek, Mphasis, Oracle Financial Services Software, Persistent Systems, Tata Consultancy Services, Tech Mahindra, Wipro, and Zensar Technologies.

Due to the impending uncertainty surrounding the imposition of US trade tariffs and macroeconomic headwinds across the major US and European markets, ICRA Vice President & Sector Head Deepak Jotwani stated that the growth momentum for ICRA's sample set of IT services companies is likely to remain muted over the near term.

According to him, future interest rate trends and policy changes made by the US government for important industries served by Indian IT services companies will continue to be the main indicators.

Reduced attrition rates and wage cost inflation, which were major worries in FY2023 and the early half of FY2024, provided respite to the IT industry.

Major Indian IT services organizations are now extending their capabilities and service offerings to offer GenAI-based solutions to their clients after training a sizable portion of their workforce in generative AI skills, the report continued.

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"This has started to show results as the inflow of GenAI-related deals for major industry players has risen in recent quarters and is expected to pick up materially over the medium term, as overall technology adoption is more pervasive. The healthcare and BFSI sectors remain the early adopters of AI/GenAI capabilities and continue to invest in the same," Jotwani said.